the one$-$year forward rate of the Japanese yen is $$0\mathrm{.}0097.$

a$.$ Determine whether interest rate parity exists, or whether the quoted forward rate is quoted too high or too low.

I. Interest rate parity exists.

II$.$ The quoted forward rate is too high. IRP does not exist.

III. The quoted forward rate is too low. IRP does not exist.

I. U$.$S$.$ investors could engage in covered interest arbitrage by exchanging dollars for yen today and then selling yen forward.

II$.$ Japanese investors could engage in covered interest arbitrage by exchanging yen for dollars today and then selling dollar forward.

III. Covered interest arbitrage is feasible for neither type of investor.

IV$.$ Covered interest arbitrage is feasible for both types of investors.